March 30, 2017 / 8:18 AM / 6 months ago

Volkswagen scandal cut German auto industry's sway over Brexit terms - ZF CEO

A Volkswagen logo is seen covered on the Volkswagen stand during the 87th International Motor Show at Palexpo in Geneva, Switzerland, March 7, 2017. REUTERS/Denis Balibouse

FRIEDRICHSHAFEN, Germany (Reuters) - Volkswagen’s (VOWG_p.DE) emissions scandal has reduced the German auto industry’s political clout, hampering its efforts to lobby for continued tariff-free trade between Britain and the European Union, the chief executive of auto supplier ZF said.

“The last two years the automotive association in Germany lost a lot of credibility,” Stefan Sommer said late on Wednesday, referring to the auto supplier and carmaker lobby group VDA’s lobbying power after VW’s diesel emissions cheating.

Sommer’s remarks came as British Prime Minister Theresa May began divorce proceedings from the European Union on Wednesday, amid fears that punitive tariffs could be included in a future trade deal.

ZF supplies eight-speed automatic transmissions for Tata Motors’ (TAMO.NS) Jaguar and Land Rover, Aston Martin and VW’s Bentley from a factory in Saarbruecken, but how it will respond in the aftermath of Brexit remains unclear, Sommer said.

“That depends on what trade terms are negotiated,” he said.

ZF employs 3,000 staff in the UK, a market which generated 1.9 billion euros worth of revenue for the company in 2016.

It has a factory in Peterlee, which makes camera systems used in lane assistance systems for passenger cars, and a plant in Solihull makes chassis technology. ZF also has a servicing site for wind turbines in Nottingham.

Reporting by Edward Taylor; Editing by Alexander Smith

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